It was once an oft-recounted biography—an executive climbing the ladder in the commercial real estate industry and retiring at the same company where the ascension began. However, such is not frequently the case in the current climate, where employers regularly make a variety of changes to retain the best and brightest.
Commercial Property Executive spoke with William Passo, founder & CEO of Passco Cos., about the factors that spur longevity in today’s workforce. Passo has witnessed countless changes in his 40-year career, half of which as head of Passco.
What are some of the factors that prompted the change in employee loyalty from workers seeking long-term positions with all the benefits that come with them, such as pension and seniority, to workers preferring a more transient professional lifestyle?
Passo: I am not sure workers are any more or less loyal than in the past. While employers used to provide pension plans that had vesting requirements related to longevity, today most employers offer 401K plans, if they offer anything at all. Those plans are portable and do not lock people in as the defined benefit pension plans of the past did. Also, I see young people today marrying later in life and planning their families at an older age than in past generations. Thus, the need for stability in the family situation, the ability to provide adequate housing comes later in life.
People today seem to want to try things out before making a commitment and that goes for career choices as well as spousal choices. Thus, we see more movement in careers in the early stages of working lives.
To some extent, the decline in unionization in the private sector can be a contributor to freedom of movement for workers who would like to expand their skills or change employers. I also suspect that, as workers improve their skills, they want to move up in the ranks when their current employer may not be able to provide an opportunity. Often, horizontal moves in employment result in higher income and additional opportunities for growth.
What are some of the aspects of Passco’s structure and culture that contribute to employee longevity?
Passo: It seems to me that members of the workforce are motivated by three things: security, lifestyle and recognition. Everyone from our “director of first impressions” to the CEO makes it a point to recognize someone who has completed or participated in an accomplishment. We utilize e-mail, notes, handshakes, pats on the back and verbal congratulations consistently. We support a work-life balance for the people of Passco that is supportive of and recognizes needs outside of the office and that those needs may require time off.
We seek to empower people when given a responsibility and operate on a philosophy of “enlist and enroll” versus “command and control.” We encourage individual thought and creativity when dealing with the issues that matter and we support them in implementing their ideas and achieving success. Our support is a form of further recognition.
Of course, people want to earn as much as possible, and I would guess our pay scale represents us well, especially since we have so many of our people participating in incentive programs and everyone sharing in year-end company profit through a cash distribution. We also celebrate the milestones of our employees who have reached five, 10, 15 and 20 years here with Passco with an impressive crystal award and a check. This year, we will be celebrating five 20-year milestones.
What are some of the aspects of today’s commercial real estate industry in particular that may or may not inspire long-term commitment?
Passo: Real estate as an industry appeals to a class of people that are more risk tolerant than some other classes. The industry offers people a way to take more responsibility for their own success. Whether in sales, leasing, management or development, people can earn supplemental income through commissions, profit participation or incentives and in most cases have some sort of a base income. By providing living base coupled with incentive compensation conditioned on successful performance, companies can attract and retain skillful people.
When the company can demonstrate continued activity and success even in down markets, qualified people can feel secure in staying with the company even though their personal incomes, as well as company profitability, may decline during the down markets. However, those companies positioned to be sustainable in the down times are the ones that will deliver the greatest rewards in the good times.
How does this apply in Passco’s case?
Passo: In Passco’s case, buying continuously even during the Great Recession, and because the property portfolio is spread across 21 states, regional downturns do not have the negative impact that local companies may experience. A further benefit to Passco is allowing professionals in different parts of the country to stay close to home near one of Passco’s six regional offices.
Proof of Passco’s success in creating an environment that cultivates employee commitment is in the numbers. Nearly 40 percent of Passco’s staff has been with the firm for more than 10 years.
To which factors do you attribute employee longevity at Passco and how do you plan to breed longevity among the Millennial and Gen X populations?
Passo: In addition to an environment conducive to an ideal work-life balance, we support longevity through the opportunities for growth that we offer and an active process of working with employees to determine their goals and support them every step of the way.
By partnering with our employees through their career journey and planning process, we help them stay engaged—the key factor in loyalty and longevity, especially for our team members in the earlier stages of their careers. That said, it is critical to our success that we do this for each and every team member, including executives.
Another way we drive success and longevity is through getting our employees at all levels outside their comfort zones through assigning them tasks that grow and refine their skills. When there is trust communicated from employer to employee, this is not scary, it is empowering.
This article was originally published on Commercial Property Executive.